How much do you charge per ride to maximize profits

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A. If you're like most college students, you are always worried about having enough money. Suppose that you decide to become an Uber driver and offer rides to students on weekends. For a fee, you will drive them to parties and pick them up at the end of the night. The table below depicts the demand schedule for rides. To keep things simple, assume that you are the only person providing this service; that is, you're a monopolist. Let's see how much money you can make.

Price Quantity of Rides Demanded

70 0

60 10

50 20

40 30

30 40

20 50

10 60

Price Quantity of Rides Demanded Total Revenue Marginal Revenue (per 10 customers)

70 0 0 -----

60 10 600 600

50 20 ____ ____

40 30 ____ ____

30 40 1200 0

20 50 ____ ____

10 60 600 -400

B. Although you have no fixed costs, you do incur a marginal cost of $15 per ride. How much do you charge per ride to maximize profits?

C. How much profit do you earn?

Reference no: EM132414702

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